The author takes one swing at the root of the problem and then misses the solution by a wide stroke.
If as the author states, "In fact most of the story behind America's recent string of large deficits is slump-related, a result of lower tax revenues due to the underperforming economy, and increased spending on things like unemployment insurance, food stamps and Medicaid. As the economy recovers, revenues increase and safety-net spending declines, the debt-to-GDP ratio should return to a relatively stable level in the short term."
However our economic "slump" is not the result of the Government taking less from taxpayers as is suggested above, quite the opposite. Our Government is making our private sector much less competitive on a global scale and has been doing so for many years. We are far more globally connected than ever in our history and the notion that increased regulations and higher taxes don't compel business leaders to move their operations elsewhere for significant advantages is absurd.
Certainly when the economy eventually recovers from the longest recession in our history the ratios of our ill-conceived spending will become more favorable as the author celebrates. But in the meantime we are clogging the engines that could drive us to a faster recovery and doing so with more and more of the wrong policies.
On the one-hand the Fed has every monetary policy pressed into full acceleration to the risk and detriment of stable prices and on the other Obama has the fiscal policy brake and the parking brake fully engaged with higher taxes, increased regulations, mandatory healthcare, no budget for planning, and a host of disincentives for entrepreneurs to want to become fresh meat in this scheme. Net result is the tax base will decline and Government will keep applying more pressure to get even less.
Those companies that are willing to stick around for the tax hikes already have one leg and an arm in our nation's treasury and sit on some Obama board for "Corporate Growth" and pay virtually no taxes already.
Waste will always be with us and that is not the point. We have a real choice to have a fast growing economy or not. We have created an environment that puts Government above the people supposedly for the good of the people, you are witnessing the results.

To be fair I put aside my personal business experience including two medium sized international startups and considered your reference about what others consider 4th in 'Ease of Doing Business.'

What you failed to mention to readers about those rankings by the IFC is that the US is 69th in ease of paying taxes, 13th at starting a business, 19th for 'getting electricity for your business', 25th for registering property, and the stats you omitted go on and on with specific rankings in some case worse than Rwanda, Armenia or Azerbaijan to list but three countries. I am not surprised countries with regulations flourish or that we trail Singapore and a host of other nice places.

I could give you many more personal facts from starting and running businesses and links to how many of our most successful US businesses deliberately and unfortunately operate in tax havens around the globe or relocate medical centers to Beijing for these very reasons, but all that may be anecdotal to you. Look I accept the 'Ease of Doing Business' rankings however they were constructed, and highlight the onerous specifics you omitted.

Of course not all regulations are bad, and not all of our Fed and tax policies are terrible. But many of them arbitrarily and unnecessarily put us behind places like Rwanda and Singapore. It is unfortunate that these are simply preferences, choices and policies that put us behind so many other countries even as we claim our highest priority is creating jobs. Trust also that my own experiences have felt a lot of Government hot air to this growth they espouse.

You said "Our Government is making our private sector much less competitive on a global scale"

I gave you a survey by the IFC / World Bank that contradicts your statement (link below). The methodology includes all of the things you mention: starting a business, paying taxes, registering property and getting electricity.

Perhaps your experience hasn't been a good one, but as you noted your experience and my experience are anecdotal. What matters is the aggregate.

In addition I never asserted that the US couldn't improve. In particular the tax system is stupidy complex. I simply pointed out that overall it isn't that bad...

Consider that Apple is the largest American company by capitalization and one of the largest in the entire world. Yet 70% of Apple's $124B in cash is kept overseas. You don't have to be 69th in the world rankings in taxes as the US is listed to know this is not helpful to our global competitiveness. This is only one of dozens of categories in which we lag and are still falling.

My point remains quite evident and undisputed that we are making our country much less competitive and that is wholly arbitrary from an administration that pays lip service to priority #1: JOBS. I wish we would make better choices for business growth and much of the class warfare rhetoric about "makers" and "takers" would go away. Waste is not the root of the problem either.

I have friends who say they are for "capitalism" except in health care, education, retirement savings, banking, energy, and mail delivery. Basically, something they require however don't desire to purchase or something they assume folks can take advantage of over with modesty.
jitendravaswani.wordpress.com

Ms. Lynn and her crowd remind me of my brother, a staunch Collier County (Fla.) Republican voter and one of the borderline SSI recipients that I referenced in a comment below. A year or so ago, he called me up and was ranting about Obama and Socialism. I said, "Jack, You'd do pretty well under Socialism." He, at least, had the intellectual integrity to say, "Yeah, you're probably right."

I have friends who say they're for "capitalism" except in health care, education, retirement savings, banking, energy, and mail delivery. Basically, anything they want but don't want to pay for or anything they think people will profit from more than modestly.

In fairness to your friends, they may support capitalism, but may also be concerned about some of its historical social costs.
PCBs dumped in the Hudson, for example.
A bridge over the Cuyahoga catching on fire, would be a second.
Bailing out banks which were leveraged 30:1, using CDOs consisting of mortgage ARMS as collateral for overnight operating loans, would be a third.

No, we're all concerned about those things. They're concerned that capitalism is economically inferior to socialism. I.e., they believe the economy would be better off with more socialism. They won't state it so bluntly of course but they believe it.

ah Collier county, one of the last bastion of the deep south... during the last election, for every 3 cars on the road, two had Romney 'believe in america' stickers on them (some still do). Heck, there was even one on the appropriate battered pick up truck with the confederate battle flag that read: 'fighting terrorism since 1492'. kind of sums up the prevailing socio-political mood and intellectual level in the area.

I believe there are creative ways to reconfigure entitlements that will make it possible to make them affordable in terms of realistic tax revenue & still maintain a commitment to being one's brother's & sister's keeper. In very brief: 1.reduce spousal social security benefits 40 years from now. You get what you put in, not your spouse's benefits. Everyone has 40 years to increase their employment history.2. Provide everyone with $300,000 of medicare benefits. A supplemental policy with a deductible this size will be inexpensive. Those who can't afford that will have to decide whether they want an elective knee replacement now or maybe save their allotment in case they need a heart bypass later. Maybe have a plan B supplement for those who never smoked & aren't overweight to go beyond the $300,000.

1. We can call it the "screw homemakers solution."
2. That's like a subsidized fully-funded HSA. HSA should be part of the solution but would you really deny a senior routine treatment because he had to have spinal surgery as a youth? And why would you give healthy people larger subsidies?

1. Most women currently work. Those who don't are more often the spouses of surgeons than trailer park residents. Among people aged 25 now & 65 in 40 years nearly all couples both work. In addition, one has a potential 45 year work life, while childrearing is mostly over in 16 years & totally over in 20, leaving 25 years to work. Spousal benefits are a subsidy of the upper-middle class. Besides the name calling, do you have any intellectual justification for this subsidy? 2.Youths don't get medicare. What are you talking about??? The average person collects several $100,000 of medicare benefits. So my proposal would take care of most people but still cap costs effectively because most of this spending occurs in the last 6 months when everything possible is done because medicare will pay for it. Hospitals will make rational decisions about when it's time for hospice if they won't be paid for further care. It's simple. Also, a policy to extend this coverage will be cheap if one wants it. Those who want that will subsidize themselves.

The waste may not total 25%. Best to design programs aligning incentives to minimize the opportunity for waste (e.g., vouchers, copayments) and resign yourself to the fact that even if we could eliminate waste further, it may not save money (e.g., drug testing food stamp recipients).

I would conclude from the above article that RM would applaud Paul Ryan's attempt to contain medicare spending. I must have missed that article because I do not remember reading it. Did RM support that effort? If not, is this article just empty rhetoric?

All Ryan would have done was stick underfunded voucher in everyone's pocket and still left the population subject to recision and cherry picking. Without changing the incentive structure to something different from fee for service, all we'd end with is crushing expenses and crap results like now. Only the very well off or congressmen would have complete coverage.

Paul Ryan's attempt to contain medicare spending involved zero cuts for the next decade, and then a promise that congress in 2022 would seriously totally for reals start to cut benefits for people beginning to enter the program that year. "Empty rhetoric" is a pretty good descriptor.

It would be hard to support something that didn't exist in reality but only in Paul Ryan's imagination. Remember, he can't give out actual numbers because it would take to much work, I mean time, yeah yeah that's the ticket.

Ryans plan was pathetically weak but I'll take it over Obama's no plan whatsoever. Someone tried to do something about this horrible out of control spending. He just gets roasted by the all the liberals.
You people just do not seem to understand reality. We will keep on borrowing and spending until people loose confidence in the currency. Then we are all heading for the third world with no government support for anything or anybody. This has happened over and over again through history. I think anyone who truly cares about this country would be trying to prevent that scene above everything else.

In my opinion, most of the posters here seem intelligent and thoughtful, so I'm going to throw out a little different angle on this 'argument'. - Might intrigue or inspire some of you.. )- I've been working for decades on trying to articulate different approaches to Economics and problem solving. - (In general I agree with Whippersnapper and RestrainedRadical's summation of today's politicians) - Yesterday, Jan 6th, 2013, I heard Bob Schieffer interview Mitch McConnell on Face the Nation:

Mitch McConnell said, "...it is time for our president to pivot and lead us in a discussion about saving this country for our children and our grandchildren...and address the single biggest issue confronting our country and its future; and that's reducing spending."

I agree that government spending and waste is a huge problem. - But I do not think that Senator McConnell, nor 99.9 % of Washington DC is trying to get to the heart of what can help this nation, and the rest of the world we are connected to.

If we want to save this country, then I think the single biggest issue should be, "How do we shift from a Consumption-based Economy to a Conservation-based Economy?"...

- I claim that those who use the phrases, "grow this economy", or "fix this economy" are simply speaking without thinking. I have never heard anyone, Economist nor prognosticator, clearly define what they mean by "This Economy"... I believe this is because no two people agree on what "The Economy" or "Economics" are... And beneath that, The Economy IS The Problem. - The type of economy that we have is currently consuming itself, as it perpetually decimates the resource base and our hopes for the future. - I believe we can collectively assess our situation, and that we can reinvent Economics, and engineer economic structures for the 21st Century.

This may sound abstract, or even taboo, to begin discussing 'Economics' from the perspective that it is not only changeable; but that we, the people can choose what kind of economy we should have. - The essence of this discussion is two fold: At the heart of it is, "what we choose to value": A Conservation-based (or Regenerative) Economy would value, and focus on, regenerating the soil, water, air, food, human health, natural disaster preparation, sustainable reparations, etc..

Also at the heart of this discussion is the belief that we can engineer, or redesign the fundamental structure of our economy such that it supports the jobs that conserve and regenerate all of our critical resources. - Just because we have not specifically done this before does not mean that it cannot be done. - Remember that our species learned to fly; and that we have flown space crafts beyond the orbits of this solar system, and are exploring the inner space of nano-technology... Also, upon entering WWII, this nation retooled its industries and worked together on a mission to fight an obvious evil. - All we have to do now is retool, and work together to regenerate the basis of a long-term economy. (One obvious evil now is consumption-based economics; and its planet-wide effects)

The notion that we can engineer our economy becomes more plausible when you consider that, "A modern economy is largely an illusion we've bought into. And a different illusion is possible..." From there the discussions that can lead to tangible change for this country, and the world, could begin. Truce...

PS. If Mitch McConnell really believed what he was saying then he could start by proposing pay cuts, pension cuts and health care cuts for himself and his 534 colleagues. And to curb the corruption and waste that has engulfed Washington, he should draft legislation to reverse Citizen's United, and get the money out of politics for good... - At this point in our history, I think to begin the discussion about what Economics could be, should be far more productive than to discuss the countless bandaids that we need to attempt fixing the dinosaur...

Prices are how we allocate scarce resources. If you think something is undervalued, you can buy it. And if you think it is over valued, you can sell it. And if you value things differently than someone else, can freely exchange things with them, determining market value and adding value. Thusly do we value things, and create value out of lesser things, like alchemists creating gold out of base lead.
-
But if you mean "we choosing what to value" as compelling people to value something, you may be able to force someone to buy something, but that doesn't mean they'll value it, nor will it make it more valuable. It's the same as trying to force someone to love, which is impossible, even in faery tales.
-
Whippersnapper Ripsnorter, Self-Proclaimed Degenerate Economist, At Yours,

Intelligently, yet perhaps curmudgeonly stated. - For the most part, I understand what you're saying. I don't think anyone can really force anyone to value anything. However Nature can, if the market didn't obscure that voice...

I just don't believe in Adam Smith's "invisible hand"; nor what I hear from most 'Economists'. I do believe in thermodynamics, and in an approach I call Cooperative Problem Solving Experiments. - Does require that the participants believe there is a problem; that they would like to try to solve that problem; and that it most likely requires an open mind and a collective effort.

The problems that seem to exist in the US and on Earth are economies failing, natural resource depletion, etc... - The Solutions may be possible. - Most likely woven together. - And apparently, not solvable by any predominant methodology. -
Think about Einstein, George Ellery Hale etc... - People who accomplished things when most of their peers said that these things couldn't be done...

I'm not saying my approach is unique. - I am saying on Jan 7th 2013, that if we want to solve our combined economic, ecological and human problems it will take imagination and an approach we have not seen before. - But I think accomplishing the unprecedented are what defines our species and what was and is really good about this country... - Or something like that...

I mean repairing in the wake of natural disasters. Which I think should be done sustainably. - Meaning, in addition to rebuilding using 'true green' principles, that we should also be mindful that events like Sandy and Katrina could very likely repeat themselves.

I don't waste time debating predictions or the causes of global warming and climate change. I think it's better to try to deal with the realities. - And incorporate repairs, preparations, and flexibility into 21st Century Economic philosophy...

(not reparations in the remuneration sense... - though I think we're all on this ship together) - sry for the lengthy response

I don't think you can eliminate all "working households" from the calculation; if they get far more than they pay in income taxes (and half of households, my own included, pay nothing in taxes) but receive major money from the government in the form of Medicaid, Medicare or welfare (mine does not) then, yes, to an important degree, "it's them."

The linked article from RM gives an 18% share of entitlement spending to "non-disabled, non-elderly, working households" where working was defined as 1000 hours or more of labor annually. Perhaps you disagree, but I would argue that such a low-income household receiving Medicaid, EITC, etc isn't the "them" that people like to believe is stealing their money. Despite welfare reform 20 years ago popular perception holds that anyone receiving "entitlement" benefits sits on a couch all day smoking weed while periodically popping out kids. Rather the picture is different--more than half of benefits go to people over 65, about 40% goes to the severely disabled or low-income earner, and the rest to everyone else. Which isn't at all what Romney, Newt, and crew told me.

They don't have to be bad people to be "stealing their money." Even if the recipients did nothing wrong and are good people worth helping, the government should never make guarantees; it should never write a blank check and commit future Congresses to write blank checks. And most certainly the credit for the act should not be separable from its underwriting such that to those "being generous," generosity has great upside and little downside, while those who made the various compromises with reality necessary to make the money (and, incidentally, create jobs) get vilified for not being willing to be as generous in quantity or permanence as the first group. I believe that all of these are unfortunately the case at present.

Yet, the Bush tax cuts, supposedly temporary origionally, is another version of your first issue, as is true with personal pledges made by certain reps to G. Norqusit. Also the second group made a lot of decisions that drained away the general prosperity of everyone else.

"Even if the recipients did nothing wrong and are good people worth helping, the government should never make guarantees; it should never write a blank check and commit future Congresses to write blank checks."

If it had, there would be no discussion of cutting deficits. Congress makes ths mess every year by writing budgets.

The Bush tax cuts _had_ to be temporary, because they were enacted by the same greasy little maneuver that the Democrats used with Obamacare-- reconciliation-- which for the tax cuts meant that they had to expire in ten years (unless extended, which as you know did occur) or fall under the Byrd Rule. I don't see them as an example of the first issue, because a pledge made to Norquist and his ilk doesn't have the force of law, but governmental promises do.

Congress does not make the mess every year by writing budgets; the entitlement programs are most of the mess, because they are what is termed "non-discretionary"-- they don't get voted on every year. What Congress does every year is to deal with the discretionary stuff, like defense spending. The non-discretionary stuff was and is (until Congress changes it) both a blank check and mandatory blank checks that future Congresses must write. That's why TE calls it the "structural deficit" and why structural change will be needed to fix it.

The dept of homland security is a blank check they write every year, for which there is no oversight, and without it, ever so likely a giant slush fund for the companies participating in that market. To me this is more of a blank check than the relatively publicly known expenses incurred by SS or Medicare.

In as much as Congress funds programs through debt, that amount does indeed represent "checks" that must be written, but _we_ (aka the American public) vote them into office.

Pledges to Norquist do have the force of law when tax cuts are passed.. kind of like the Bush tax cuts that have now magically turned into permanent cuts.

In my view, cutting taxes without cutting expenses is no different that created expenses and funding them with "blank checks".

As far as changing how things are done, I fully agree it has to change. Either the programs live with revenues collected each year or Congress should levy debt which is then assigned to each citizen, transferable to all heirs. That might force us (aka the American public) to think a little more about cost of said programs.

You can't just point to statistics that say government transfers are going to the disabled or the sick and say "look! they're going to the disabled or sick! That means that they are going to people who have successfully claimed to be disabled or sick.

DI is particularly prevalent to fraud. Manual and dangerous labor has declined, and yet according to the stats everyone is getting injured a whole lot more. Beware gentle readers of the Economist! apparently our white collar cubicles are filled with hidden dangers that surpass the deadliness of the steel mill, garment factory, or coal mine.

No, it's fraud. A lot of these disabled people are, in fact, simply suffering from free government money. The injuries that people are suffering from have shifted towards hard to disprove claims like back problems and stress. I don't think is because illness in America has become more cunning.

And many disabled people, and many unemployed people, are in fact ably employed. They just aren't reporting it because they'd lose their benefits otherwise. And many unemployed people aren't "unemployed" as in looking for work and not getting it, they are in fact not looking for work, or not willing to accept the work they could get, because the benefit of working is less than the cost of having to go to work, get bossed around, AND losing unemployment benefits.

If you extend unemployment benefits, as Congress has developed a bad habit of doing, unemployment will go up. We can argue about how much, but if you're saying no one is on that margin, you're an idiot. So the real unemployment rate is what it would be were there no unemployment insurance, which is lower, and everyone who would be employed if that was the case, is only lazy, not unemployed.

And there are plenty of elderly people who can work, and are therefore not elderly, just old. Less than young people, but still. If you work, you don't get retirement benefits though, so they just not to.

I'm not saying everyone on UI or DI or SS is a deadbeat, far from it, there are many people who really are disabled or sick or too old to work and I do think they deserve support. And doing so will probably result in some fraud no matter what, but we should be trying to make sure it is less than it is, and there are things we can do, and we should be doing them, and I think that's a perfectly good point to say that we should do them before you get more of my money.

But this article just blatantly chooses to ignore it. It says the money goes to DI, so it goes to disabled people, and it isn't fraud. Believe it or not, there isn't a part of the government budget labeled "waste & fraud", so it is not surprising that this writer, using government statistics, has found that there isn't any. It's just hilarious to watch the Economist deploy it's analytic wit to prove that X=X.

Knowing some SSI recipients, my anecdotal experience suggests that a fair number of them could work if they really wanted to. Google SSI or watch cable news. There is an entire industry out there to help you qualify.

First off, let's keep a sense of proportion. Disability costs the gov't about $180 billion a year. That's not chump change, but if you can establish that (say) 50% of it is fraudulent, and if you can correctly identify and eliminate only that 50% without impacting genuine sufferers - note, that's two distinct challenges and neither is easy - you could save about 8% of the current deficit. On more realistic assumptions, it might be closer to 3-4%. So it's a start, but you're going to need to find another 25-30 spending categories of the same size before you can balance the budget that way.

I'm not saying there is no fraud in the system, but I suspect it's routinely overstated (by people who - like everyone else - are looking for excuses not to address the deficit). For instance, the much-ballyhooed growth in the number of claimants: this may be partly fraudulent, but there are *also* perfectly valid reasons why the roster of disabled people may be growing. Diseases and accidents that would have killed people 40 years ago, now leave them alive but crippled, thanks to better medical care and safer environments. Meanwhile, some people who would previously have worked now find they can't, because employers are no longer willing to accept the liability. (Take epileptics, for instance: if you belong to the small subset whose condition *can't* be perfectly controlled by drugs, employer after employer will turn you away, on the grounds that you could cause an accident that would open them to ridiculous liability suits.)

I have no experience of benefits in the US, but I have helped a friend claim sickness benefit in the UK (which has a similar issue with a growing claimant base). The regime there required people - who are, by definition, very sick - to fill in a 40-page form, complete with multiple medical reports, and submit it within a tight time window. I found it intimidating, and I was perfectly healthy. For her, it was an impossibility. So when you put hurdles in the way of collecting sickness benefits, just remember who you're asking to clear them.

Apparently, you are factually or cognitively disabled because you didn't bother to provide a single fact to support this fraud. Hard world doesn't exist anymore? You have no idea what you are talking about? Any job where you work as a human robot doing repetitive tasks will lead to a disability for the human body was not designed to work like a machine. What is hilarious is you avoiding facts and evidence because of your dogma.
Your money? Where is this money that is yours because only you have seen it?

Let's stop beating around the bush. These people are racists, who hate to see anything going to those with darker skin than their own. You can prove to them that they are the cause of the deficit until you turn blue in the face,and it will make no difference. Their opposition to the deficit is code, and has nothing whatever to do with the nation's fiscal balance.

I wonder what your evidence is for the assertion that people who oppose much government spending are racists. Are we to assume that it is possible to spend $3.5 trillion a year (the federal budget) without waste?

Are those who, like myself, are skeptical of the Department of Education "racist?" I recall when that department was established and it was not because of a crying national need. It was Jimmy Carter's payback to the Teachers Unions for supporting him in '76.

The department has a budget of c. $70 billion annually. It does not operate a single school. It has 5,000 employees. How many people reading this post have had their lives improved because of their contact, if any, with the Dept. of Ed?

Pell Grants, administered by this department, are helpful in paying for education. But, their existence pushes up the cost of the education. Zero sum game.

So, after thirty-five years of this department and the expenditure of hundreds of billions of dollars can we point with pride to our school systems and say, "Yes . . . test scores are up, racial gaps have closed, we're at the top of the international pecking order in educational results and, all in all, we owe it to the Dept. of Education?"

I do not believe it is "racist" to believe that some government endeavors are a net financial loss to the nation.

Yeah, it might not be the best reason, but "sticking it to whitey" is a reason for less government.
I never got why a majoritarian institution like democracy helps minorities, but then again I've also had democrats tell me that spending money saves money. Listening to the left talk about government always reminds me of a priest talking about God.

You fling accusations of racism around so often on these boards that your credibility on the subject is shot. I think many on the Left are genuinely addicted to the ease of it, but frequent, general accusations of racism are the moral and intellectual equivalent of a TV dinner.

"The home interest deduction? You mean letting people actually KEEP the money they earned?"

The home interest deduction is taking money *I* earned (because I rent, and therefore don't collect the government subsidy called a "mortgage insurance deduction") and giving it to *you* to pay part of your mortgage.

I suppose diabetes or a heart condition doesn't require any particular treatment.

Don't be droll, medical coverage covers a lot of expenses.

And for those of us who are under 55 and pay into a system most of us realized long ago would be killed before we retire? By that time you'll be long gone, and of course, you don't give a fig.

Keep money you earned? You get a deduction for interest on dbt. How about those of us who pay friggin rent and have elected not to purchase a home? Why does my tax dollar subsidize you and your bank's friggin profits?

The deduction still allows me to keep money I EARNED. No earnings, no need for deductions. It's pretty basic.

You want to have a deduction for a mortgage? Buy, don't rent. Your choice -- not mine.

Medical expenses are not a "living wage." They are what a humane society does to lessen the suffering of the ill. If you are in favor of letting them suffer, well, that IS a philosophy. Of sorts.

If you are under 55 you are growing up in a more difficult world. That you largely made yourselves. I have contributed tax money to the system since 1962. I have wondered why people who are younger than me are so "liberal" and enthusiastic about being taxed. (In the last election, they voted largely for Obama as a cohort.) If one consistently votes for higher taxes one has less money to spend on one's family. I don't know why you do it but I guess you have your reasons. I am not sure, however, why you complain.

And my yax dollars subsidize your house ownership, even though I EARNED every friggin penny too. Why the hell should me and every other person who elects or cannot afford a house give you a break? You want to buy a house, fine. Just don't think you're entitled to have the gubnit subsidy to buy an price inflated manson on a that mortage fattens banks earnings, Mr Welfare Queen.

Andros, I agree with being indignant when the government takes our money, but not being particularly indignant that it includes mortgage payments. I think it's unfair that the government doesn't do to you what it shouldn't, but does to me.

Want the deduction? Buy, don't rent. Your call.

Kinda the government's call, isn't it, and it shouldn't be. And you can't just say that if we don't want the government to steal from us we should just live our lives according to it's insane whims. By this logic it's our fault for getting taxed because we chose to earn it.

Minorities are the only one's taking home interest deduction, or SS or Medicare? Hmmmm... but not the majority... hmmmm. - Teacup

That's the complete opposite of what I was saying. I was actually pointing out that I belong to an ethnic group predisposed to not pay taxes on our abodes. Our government is like an un-God that passes over the houses of those who weren't enslaved. Weird.

Only because there will be more renters, or alternately the price of a house will go down or not inflate so much. I find it objectionable that housing inflation is seen as good, as if shelter and property inflation are good for the average joe trying to buy shelter.

Because we who feel "entitled" have, so far, been able to convince the politicians to favor us with tax policy and discriminate against you as a renter. We have been assisted by the banks and building trades in this endeavor.

I think this sort of illustrates the point of the article doesn't it. Government spending and subsidies via the tax code are bad, excpet for the ones i get. Those are good. Its the goodies that the other get that are ruining this great country of ours.. Oh say can you se...

You're actually starting halfway through the mental process. The start is, do we really want this much government?

If you made people actually pay for all of the government that they say they want (that is, pay for with taxes, not by printing funny money or running up debt for the future to pay), then I'd guess that 90% of the country would say, "Absolutely not! We don't want to pay for all this." They want the government, but they don't want it bad enough to pay for it.

THEN you have the conversation about what to cut, and things get harder. It's like an overweight person thinking about dieting: "I have to eat less. But I can't cut out my latte... or my ice cream... or my Big Mac with fries..." Eventually, we're going to have to choose, and that's going to mean choosing against some stuff that we'd like to do (and that some of us would very strongly like to do).

But RM ignores the step of realizing that the government is in fact bigger than people are willing to pay for and, noting that it's hard to decide on actual cuts, concludes that actual cuts are not what people really want or need.

The only reason that there hasn't been an enormous taxpayer revolt in this country is because we aren't actually having to pay for all that we're asking the government to do for us.

Absolutely agreed, rewt66. I’ve been saying for a while now that the shortest route to smaller government is to raise taxes so that they cover all government spending (plus, say, 10% to pay down outstanding debt, to be dropped once the debt is eliminated). Deficit spending is the largest government subsidy of all time, and massively distorts price signalling. What I still can’t figure out is why so many so-called “free-market fiscal conservatives” reject this outright, and with great vigor.

Can someone explain one thing for me? Isn't social security supposed to be a stand alone program with its own dedicated revenue source i.e. the payroll tax? So how is it part of the year to year fiscal imbalance and 20% of the federal budget?

If it is not generating (or soon to be) enough revenue to support the payouts shpuld that be a separate issue for from the huge deficits/debt being run up by the government?

The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."

There seems to be a certain sub-species of liberal voter who doesn't quite catch that this (requiring that you buy salsa even if you only need/want ketchup) is exactly the problem with the idea of government as the solution to all societal ills. Top-down, one-size-fits-all solutions in fact fit almost nobody, but everybody has to pay for them.

{That said, I'm sure there's some long-winded liberal argument about how critical to the nation's future salsa production is, and how many jobs would be lost if we allowed people to opt-out of buying salsa ...)

I was accosted by dwarves, and ran out without my pocket handkerchief, but it's good to know I was missed. The Sackville-Bagginses had left me with the impression that I had missed my calling as Troll food. :P

There's also a long-winded conservative argument about how critical to the nation's future defense spending is.

It is of course, but when we spend more than the next 14 or so nations combined, isn't there any room in there for these "masters" of minimizing government to work their magic?

Actually that lost jobs bit would probably resonate pretty evenly across the political spectrum for any area of government spending/subsidies proposed to be cut. From green-energy to corn farming it's always the others sides pet projects that need to be cut.

'There is a reason politicians often do not specify which spending cuts they're talking about in budget negotiations: the popular ones (see cuts to foreign aid) don't add up. And, in general, Americans do like the programmes that primarily drive the country's fiscal imbalances.'

Huh, I'm sure I've seen this before somewhere...

'An average earner contributes £57 a year to Britain's overseas aid budget, and £28 to the EU... £57 a year to the bill for unemployment benefit, but £800 a year towards old age pensions.'

I would love to see where and how "the cuts" should be made. No one seems willing or wants to look at inefficiencies and waste. How do we make work what we have. We have politicians that don't work a full schedule and get lifetime benefits and on top of that they regulate themselves, talk about entitlements. Subsidies are never put on the table. What about just staffing the IRS adequately to enforce the existing laws? There are many little things that could add up if the politicians were really serious about looking at the budget. I don't think they really are serious about solving the problems, I think they are more about being obstructive, keeping the special interests happy to the destruction of all else, and staying in office. It is after all a pretty cushy job, benefits for life, barely half time schedule and not expectation of having to do anything of real value.

Medicare has lots of legislated inefficiencies, health insurance companies add their own layers of costs and wastes, and continuing to profitize every aspect of health care doesn't help either.

I think the American people would be willing to cut and give up items if there was an honest discussion about the expenditures, but until our politicians have the integrity and independence these discussions will remain on a mobius strip.

Actually, Medicare takes $2-3 per $100 spent on medical care given, in contrast to private insurance programs and HMOs, which "cost" from $10 to $34 per $100 of care given. The difference is that Medicare doesn't pay million dollar executives nor lobby Congress.
We just got through an election where the Republican candidate promised lots of inefficiencies cut, but would never specify which ones. If you have identified waste, why don't you list it in detail, instead of vague generalities.

I must have written my response totally bassackwards because that is just what I am saying, the health insurance profit component is one of the major reasons health care costs are so high, although I just read a headline that says healthcare costs are declining. The inefficiencies that I see and experienced would not solve the entire problem, but the little nickels and dimes dripping out certainly add up in the long run. My point was that the entire discussion goes around and around there are those who "declare government is too big", others say
"No, it's fraud. A lot of these disabled people are, in fact, simply suffering from free government money. The injuries that people are suffering from have shifted towards hard to disprove claims like back problems and stress. I don't think is because illness in America has become more cunning."
Someone else adds : "That is, you don't get to buy the ketchup, and leave the salsa on the shelf." whatever that means.
Another person says it is entirely the Department of education that is wasteful.
It has become like the 3 blind men describing the elephant. We don't really know the truth, what we do know is presented with such distortion and partisanship that an educated decision and choice can't be made. To top it all off our politicians lack the will and integrity to address the issues straight on because the special interest lobbyists would not pay them large amounts of money to continue to look after their special interests.

Also if indeed the government's total cost put into making iPhones was $450 and the rest was pure profit then making phones might be an OK idea, but isn't that basically what we have asked the Postal Service to do? But the special interests want to see it privatized so they can make more money and the lap dog politicians are doing everything in their power to bring it down.

:P
I think we should get rid of administrative costs. It would be easier if, instead of having to go through the rigamarole of filing for benefits, I just walked into Fort Knox and could take what I thought was fair. Think of all the money we'd save on guards!

But let's bring up why Social Security is now such a big chunk of that "waste". Back in 1980, when the need for more Social Security outlays for the retiring baby boomer was foreseen, Social Security was supposed to move from pay-as-you go to a trust fund. The income on FICA was raised from $30k to $90k, and the start of a surplus was being built. Ronald Reagan's tax cuts were too large, and the deficit grew too large, and borrowing against the surplus was used to balance the budget. As a Baby Boomer who entered the economy in 1984, and paid the higher FICA, I prepaid for my retirement in Social Security, only to have lost it to the rich, who had their taxes cut. I am owed that Social Security retirement. I earned it. It is more than an entitlement. Robert L Marshall, Austin, TX

You did not earn anything, you paid taxes to fund the government. Social security is not a defined benefit pension and never has been. Your social security will come from the pockets of your children and grandchildren, and you will almost certainly take out more than you put in (like most of the baby boomer generation which reaches eligibility). You and the rest of your generation have lived financially irresponsibly off a long economic boom and now claim that you should be insulated from cuts when the bill comes due. Shame on you.

I would love to see the polling numbers for the percent of seniors who believe decreasing the deficit is the #1 priority, and the percent of that group that favor immediate cuts to Social Security and Medicare.

Reagan's tax cut was close to deficit neutral. It was bipartisan after all. If you want to blame any policy for the deficit under Reagan, it's defense spending.

The rich paid more into Social Security than you did so you can stop using them as your scapegoat. That's the Democrats' dilemma. Casting SS as a savings program makes it more durable but also makes it more difficult to make more progressive.

"And as long as they are able to find convenient scapegoats for the country's fiscal challenges they will oppose the infliction of pain on themselves. Someone needs to tell these people, it's not them, it's you."

When you are 20 or 30 or even 50, it is nigh on impossible to predict what your medical condition will be when you are 60 or 70 or 80. That is why a moral society allocates funds so older citizens are not just left to die by the roadside. I did it when I was younger and I understood why it was necessary.

Morality sometimes dictates a zero sum game. It may be cheaper to euthanize older citizens than to pay for the health care they can not longer afford. Yet, such an alternative would definitely be a financial winner for the younger, healthier segment of the population, at least, until they got older and sicker. It would be even better financially to pick an age, let's say 75, and by law withhold Medicare treatment for all those above that age who don't have the cash on hand to pay for needed treatment. Why haven't we done this...yet? It is because so far there are still majority of Americans to whom making the moral choice is important enough to pay for.

Thank You for this eloquent response. I have been the audience of more than one tongue lashing from the AARP demographic that essentially stating that "I worked all those years and paid in my money & now I deserve it back along with health care," and all the while intimating any contrary view is morally reprehensible. Meanwhile I cant help but think about the all the broad infrastructure that generation voted for financed by bonds that Im still paying while that samme infrastructure is worn out.

"The stagnation of the Empire in the between-war years affected everyone in England, but it had an especially direct effect upon two important sub-sections of the middle class. One was the military and imperialist middle class, generally nicknamed the Blimps, and the other the left-wing intelligentsia. These two seemingly hostile types, symbolic opposites - the half-pay colonel with his bull neck and diminutive brain, like a dinosaur, the highbrow with his domed forehead and stalk-like neck - are mentally linked together and constantly interact upon one another; in any case they are born to a considerable extent into the same families."

I think the essay should be required reading. You can swap out 'England' for 'America' and get a pretty accurate look at our current problems.